US Tax Obligations When Moving to Europe
The US taxes citizens on worldwide income no matter where they live, so moving to Europe doesn't end your US filing obligations — but tax treaties, the Foreign Tax Credit, and the Foreign Earned Income Exclusion generally prevent the same income being taxed twice.
At a glance
- Foreign Earned Income Exclusion (2026)
- $132,900 — per person, adjusted annually for inflation; applies only to earned income, not passive income
- Federal estate-tax exemption (2026)
- $15,000,000 — per individual, made permanent by the One Big Beautiful Bill Act
- Self-employment tax
- 15.3% — still owed to the US unless a Totalization Agreement applies and an exemption is filed
- Annual filing requirement
- Form 1040, worldwide income — required regardless of where you live; automatic 2-month extension to June 15
Eligibility
- On worldwide income, via Form 1040, even while living abroad. Required
- FBAR (FinCEN 114) is required if your foreign accounts' combined balance exceeds $10,000 at any point in the year. Required
- Via the Foreign Tax Credit and/or the Foreign Earned Income Exclusion, as applicable to your situation. Required
- For self-employment and Social Security tax, if the US has one with your host country. Required
What actually changes
A US tax treaty with your host country generally allocates taxing rights between the two governments so the same income isn't taxed twice, and the Foreign Tax Credit lets you offset US tax liability with taxes already paid abroad. The FEIE lets you exclude a set amount of earned income from US tax each year, but only if you meet the Physical Presence Test (330 full days abroad in a 12-month period) or the Bona Fide Residence Test — it doesn't apply to investment income, and you'll still owe self-employment tax unless a Totalization Agreement exempts you. Property you buy in Europe is separately subject to that country's property and capital-gains taxes, and rental income earned there must still be reported to the IRS (with a Foreign Tax Credit available for tax already paid). VAT, which most European countries charge on goods and services, isn't something you file for directly but does affect day-to-day costs.
This is general information, not tax advice — every situation is different, and cross-border tax rules change. Consult a licensed cross-border tax advisor for guidance specific to your circumstances.
Why work with BIZ TRP
BIZ TRP handles residence and company-formation planning, not tax filing itself — but the visa or residency route you choose directly affects your tax-residency status, so we make sure the two are considered together.
- Advisor coordination. We can introduce you to cross-border tax advisors who specialize in US-Europe filings.
- Residency-status flagging. We flag how your specific visa or residency choice affects tax-residency status in each country.
- Move timing. We help think through timing your move around the FEIE's physical-presence or bona-fide-residence tests.
Common questions
Do I still have to pay US taxes if I live in Europe?
Yes — the US taxes citizens on worldwide income regardless of residence, though tax treaties, the Foreign Tax Credit, and the Foreign Earned Income Exclusion generally prevent the same income being taxed twice.
What's the current Foreign Earned Income Exclusion amount?
For 2026, it's $132,900 per person, adjusted annually for inflation. It only applies to earned income, not passive income like dividends or capital gains.
Will I owe both US and European Social Security taxes?
Not usually — the US has Totalization Agreements with many European countries that let you pay into just one system, though you typically need to apply for the exemption rather than it applying automatically.
Moving to Europe and want the tax side handled correctly?
We'll help align your residence-permit planning with your tax-residency situation, and connect you with a cross-border tax specialist for the filing itself.
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